Binus Business Review
Vol. 12 No. 1 (2021): Binus Business Review

Customer Loyalty: The Difference between Full-Service Carriers and Low-Cost Carriers in Indonesia

Yasintha Soelasih (Atma Jaya Catholic University of Indonesia)
Sumani Sumani (Atma Jaya Catholic University of Indonesia)



Article Info

Publish Date
04 Feb 2021

Abstract

The level of competition in the aviation industry has increased since the regulation change in 1999. Aviationcompanies in providing services can be divided into three categories: full service, medium service, and no-frillsservice. Both Full-Service Carriers (FSCs) and Low-Cost Carriers (LCCs) experience a high level of competition.The research aimed to look at the differences in customer loyalty on domestic FSCs and LCCs in Indonesia.The differences were shown from testing the effect of service quality on customer loyalty mediated by customersatisfaction and behavioral intention to use. Respondents were FSCs and LCCs passengers. Samples were takenby purposive sampling. There were 522 respondents for FSCs and 529 respondents for LCCs were observed bydistributing questionnaires. Then, the research tested the validity and reliability of the variables using ConfirmatoryFactor Analysis (CFA), Composite Reliability (CR), and Average Variance Extracted (AVE). Structural EquationModeling (SEM) was also applied to examine the hypothesis. The results show the formation of customerloyalty from service quality, customer satisfaction, and behavioral intention to use on FSCs and LCCs. The mostsignificant factor is the behavioral intention in forming customer loyalty in FSCs and LCCs. Meanwhile, customersatisfaction does not influence customer loyalty for FSCs and LCCs.

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Journal Info

Abbrev

BBR

Publisher

Subject

Economics, Econometrics & Finance

Description

Binus Business Review is an international journal published in March, July, and November hosted by the Research and Technology Transfer Office (LPPM) of Universitas Bina Nusantara. The journal contents are managed by the Binus Business School, Faculty of Economics and Communications, and Forum ...